environmental report 2004

Environmental Report 2004(April 2003–March 2004)

1 Sumitomo Bakelite

Tomitaro Ogawa

President

Contents

Message from the President 2

Management Policies 3

Environmental Targets—Domestic Facilities 4

Environmental Targets—Overseas Facilities 5

Environmental Impact and Material Balance 6

Summary of Environmental Impact Reduction Activities 7

Environmental Accounting 9

Promotional Organization 11

Environment-Conscious Products 12

Reduction of Environmental Impact Substances 15

CO2 Emissions and Energy Conservation 17

Waste Disposal 19

Recycling 21

Soil and Groundwater Contamination Investigations 22

Site-Specific Environmental Impact Data—Domestic Facilities 23

Site-Specific Environmental Impact Data—Overseas Facilities 25

Chemical Product Safety, Audits, Education, and Training 27

Occupational Safety and Health 29

Elimination of CFC Usage, Management of PCBs, and Responses to Environmental Complaints 31

Green Purchasing 32

Social Activities 33

ISO 14001 Certification 34

History of Environmental Conservation Activities 35

Independent Review Report 36

Corporate Data 37

Message from the President

Environmental Report 2004 2

The Sumitomo Bakelite Group has the mission of achieving sustainable growth and maximizing its corporate value over

the long term by leveraging its plastics processing expertise to develop and provide society with products that feature

new types of functionality. In its core plastics processing businesses, the Group is seeking to provide products with

characteristics that meet customers’ various needs and enable customers to increase the value of their products and

businesses. In other words, our mission entails developing new types of functionality that customers find highly valuable,

incorporating that functionality into plastics products, and supplying those products to customers.

We are striving to step up our development and marketing of environmentally friendly products—products that neither

contain hazardous or harmful substances nor entail the use of such items in their manufacture, that do not require our

customers to use such substances, and that are easily recyclable with basic constituent materials that are easily recov-

erable—and we view these activities as integral to our functionality-oriented mission of creating what are essentially

plastics products with additional environmental functionality. Our current objective is to expand the share of total net

sales accounted for by environmentally friendly products to 20% by proceeding with the development of new products

with environmental functionality. In fiscal 2003, ended March 31, 2004, we raised this percentage to 13%, and it

reached 18% in the first quarter of fiscal 2004.

The Sumitomo Bakelite Group has continued to implement “society- and environment-compatible management” as a

crucial policy for its business activities, and it has implemented Responsible Care measures and participated in the

Japan Responsible Care Council since that body’s establishment in 1995. A voluntary endeavor, Sumitomo Bakelite’s

Responsible Care program involves implementing and improving environmental protection measures aimed at ensuring

health and safety over a product’s entire life cycle, from development through production, distribution, use, final con-

sumption, and disposal. In addition, Sumitomo Bakelite proactively participates in university programs, enlightenment

activities at exhibitions, and other such projects.

Topics covered in this report include the following:

• We are proceeding with measures to ensure strict compliance with Japanese and overseas environmental laws and

regulations throughout the worldwide business activities of the parent company and more than 60 Group companies.

To further increase the rigorousness of our compliance performance, we established a clear-cut code of Compliance

Regulations as well as a Compliance Committee in October 2003. Regarding the ISO 14001 environmental manage-

ment system, 22 production plants (58% of the 38 plants of 32 Sumitomo Bakelite Group manufacturing firms) have

obtained certification, and an additional four plants are scheduled to be certified during fiscal 2004.

• Previously, the scope of our medium- and long-term plans for reducing environmental impact included only domes-

tic Group companies; now, however, the scope has been expanded to encompass overseas Group companies.

Moreover, the number of zero waste emissions facilities among domestic plants has been increased from one

to three.

• We are continuing to implement occupational safety and health programs aimed at providing healthy and pleasant

work environments as well as ensuring accident-free operations.

• Our contribution to the promotion of Green Sustainable Chemistry received official recognition, as our G Series of

self-extinguishing epoxy resin materials for semiconductors was recognized as an environmentally friendly chemical

product lineup by the Green Sustainable Chemistry Network through the Environment Minister Award.

We hope this environmental report will effectively promote a good understanding of the Sumitomo Bakelite Group’s

environmental conservation efforts, and we would be grateful to hear your comments and suggestions.

August 2004

Tomitaro Ogawa,

President

Management Policies

3 Sumitomo Bakelite

The Sumitomo Bakelite Group has set environmental targets based on environ-mental and safety management policies in line with its basic policy of “societyand environment-compatible management.”

Corporate Policies for Safety, Health, and the Environment

Philosophy

In all its operations, Sumitomo Bakelite Co., Ltd., will endeavor to conform with the

highest standards dictated by the Responsible Care concept and give due considera-

tion to human health and safety as well as to the protection of the environment.

Policies

In accordance with this philosophy, we will

1. Evaluate the safety, health, and environmental aspects of all corporate activities, from

product design through product disposal, strive to minimize the environmental impact

of corporate activities, and undertake to develop safer products and technologies;

2. Make sustained, Companywide efforts to promote resource and energy conserva-

tion, recycling, and waste reduction;

3. Implement operational safety management programs for our employees and neighbors;

4. Work to improve the safety of products and transportation operations and provide

product safety information to customers and others;

5. Comply with all relevant laws, regulations, and agreements associated with safety,

health, and the environment while autonomously establishing administrative rules

designed to promote safety, health, and environmental protection; and

6. Perform inspections of environmental protection and safety activities as well as work

to maintain and improve systems for administering such activities.

Management Policies

1. Enforce and expand core businesses

2. Enhance customer satisfaction

3. Consolidate management and promoteinternationalization

4. Establish management that is highly compatible with society and theenvironment

Environmental Targets—Domestic Facilities


Under Sumitomo Bakelite’s Corporate Policies for Safety, Health, and theEnvironment, the Company set medium- and long-term targets using fiscal1999 as the standard for comparison and moved forward with Groupwideefforts starting in fiscal 2000.

We have established four environmental target areas: 1 the amount of waste generated, 2 zero waste emissions

(complete elimination of wastes disposed of as landfill or externally incinerated), 3 emissions of solvents and others,

and 4 carbon dioxide (CO2) emissions.

The scope of the environmental impact data compilation includes:

• Sumitomo Bakelite Co., Ltd.

Amagasaki Plant (including subsidiaries and affiliated companies on the premises), Shizuoka Plant (including sub-

sidiaries and affiliated companies on the premises), Utsunomiya Plant, Tsu Plant, Fundamental Research

Laboratory, and Kobe Fundamental Research Laboratory

• Akita Sumitomo Bakelite Co., Ltd., Artlite Kogyo Co., Ltd., Tokyo Kakohin Co., Ltd., Hokkai Taiyo Plastic Co., Ltd.,

Yamaroku Kasei Industry Co., Ltd., Kyushu Bakelite Industry Co., Ltd., and Sano Plastic Co., Ltd.*

*Sano Plastic included through June 2002

Medium- and Long-Term Environmental Impact Reduction Targets—Domestic Facilities

1 Amount of waste generated 70% reduction (Target date: 2006)

2 Zero waste emissions Complete elimination (Target date: 2005)

3 Emissions of solvents and others 99% reduction (Target date: 2005)

4 CO2 emissions 14.6% reduction (Target date: 2010)

19992002 2003 2004 2005 2006

Action Unit (Base year)Results Results Plan Targets Targets

Results

(1) Amount of waste Tons/year 12,800 8,471 7,449

51% reduction66% reduction vs 1999 70% reduction vs 1999

generated (6,300)

(2) Zero waste emissions Tons/year 5,137 2,413 56392% reduction

100% reduction vs 1999 Same(400)

(3) Emissions of solvents Tons/year 3,164 1,398 1,018

87% reduction99% reduction vs 1999 Same

and others (400)

(4) CO2 emissions* Tons/year 130,769 127,169 123,5857.3% reduction

12.1% reduction vs 1999 12.6% reduction vs 1999(121,200)

* Due to the introduction of a co-generation system, CO2 emission plans for 2004 and subsequent years have been revised.

Environmental Impact Reduction Results and Targets—Domestic Facilities

Environmental Targets—Overseas Facilities

5 Sumitomo Bakelite

The Company has set medium- and long-term targets for reducing the environ-mental impact of overseas facilities, using fiscal 2003 as the standard for com-parison. Improvement efforts based on the environmental impact plan wereinitiated in fiscal 2004.

We have established three environmental target areas: 1 the amount of waste generated, 2 zero waste emissions

(complete elimination of wastes disposed of as landfill or externally incinerated), and 3 CO2 emissions.

The scope of environmental impact data compilation includes the 16 manufacturing facilities of the following compa-

nies: Sumitomo Bakelite Singapore Pte. Ltd., Sumicarrier Singapore Pte. Ltd., SumiDurez Singapore Pte. Ltd., SNC

Industrial Laminates Sdn. Bhd., BASEC Hong Kong Limited (Dongguan), P.T. Indopherin Jaya, Sumitomo Bakelite

(Suzhou) Co., Ltd., SB Flex Philippines, Inc., Sumitomo Bakelite (Taiwan) Co., Ltd., Bakelite Precision Molding

(Shanghai) Co., Ltd., Rigidtex Sdn. Bhd., Durez Corporation, N.V. Sumitomo Bakelite Europe S.A., Sumitomo Bakelite

Vietnam Co., Ltd., Sumitomo Bakelite Macau Co., Ltd., and Fers Resins, S.A.

Medium- and Long-Term Environmental Impact Reduction Targets—Overseas Facilities

1 Amount of waste generated 30% reduction (Target date: 2006)

2 Zero waste emissions 45% reduction (Target date: 2006)

3 CO2 emissions 1.5% reduction (Target date: 2006)

Environmental Impact Reduction Results and Targets—Overseas Facilities

2003 2004 2006 2009

Action Unit (Base year) Plan Targets Targets

Results

(1) Amount of waste Tons/year 13,703

3% reduction30% reduction vs 2003 50% reduction vs 2003

generated (13,300)

(2) Zero waste emissions Tons/year 8,4506% reduction

45% reduction vs 2003 70% reduction vs 2003(7,900)

(3) CO2 emissions Tons/year 127,7615% increase*

1.5% reduction vs 2003 3% reduction vs 2003(134,700)

* Plans call for the rise in CO2 emissions to be restrained to 5% despite a 30% rise in production volume.

Environmental Impact and Material Balance


The chart below illustrates the flow of materials at Sumitomo Bakelite in termsof the environment.

Raw materials

Emissions

Basic resinmaterials71,603 tons

Resins42,615 tons

Basic materialsand fillers39,316 tons

Solvents5,759 tons

Supplementalmaterials,

others9,014 tons

Energy61,145kr

(crude oil equivalent)

Water6,943,000m3

INPUT

OUTPUT

Products153,080 tons

(total sales of other prod-

ucts that are difficult to

calculate by weight:

¥25,410 million)

Valuable recyclablematerials7,447 tons

SOx: 210 tons

NOx: 52 tons

Soot and dust: 1 ton

CO2: 121,742 tons

Fuel: 67,918 tons

Electricity: 53,824 tons

Drainage: 8,003,000m3

(Chemical Oxygen Demand(COD): 26 tons)

Waste: 7,377 tons

Emissions of solvents and others:1,017 tons

(Including substances subject to the Pollutant Releaseand Transfer Register (PRTR) Law: 236 tons)

The chart indicates such input as raw materials and energy and such output as products and substances that are

released into the environment. To reduce environmental impact, Sumitomo Bakelite strives to minimize emissions as

well as conserve resources by curtailing consumption of such input as raw materials, energy, and water.

Scope of compilation: Sumitomo Bakelite Co., Ltd. (Amagasaki Plant, including subsidiaries and affiliated companies on the premises, Shizuoka Plant, including sub-

sidiaries and affiliated companies on the premises, Utsunomiya Plant, and Tsu Plant), Akita Sumitomo Bakelite Co., Ltd., Artlite Kogyo Co., Ltd.,

Tokyo Kakohin Co., Ltd., Hokkai Taiyo Plastic Co., Ltd., Yamaroku Kasei Industry Co., Ltd., and Kyushu Bakelite Industry Co., Ltd.

( )

7 Sumitomo Bakelite

The Sumitomo Bakelite Group undertakes its environmental activities by settingspecific targets for the reduction of environmental impact.

Summary of Environmental Impact Reduction Activities

Item Fiscal 2003 targets

Amount of waste

generated

Zero waste

emissions

Emissions of

solvents and others

CO2 emissions

Reduce total waste amount, including wastes disposed of as landfill,

externally incinerated, internally incinerated, or externally recycled

(expenses paid), to 6,600 tons or less

Reduce total amount, including wastes disposed of as landfill or

externally incinerated, to 1,200 tons or less

Reduce emissions into the atmosphere of solvents and other chemical

substances covered by the PRTR Survey of the Japan Chemical

Industry Association (JCIA) to 640 tons or less

Reduce CO2 emissions that result from energy consumption (fuel and

electricity) in production operations to 127,500 tons or less


From fiscal 2002, two laboratories and five affiliates were newly included in these efforts, and currently these efforts

encompass the 12 facilities and companies listed on page 4, with progress monitored on a monthly basis.

Targets and corresponding results for fiscal 2003 are indicated in the table below. The target for the reduction of

waste generated was not attained, but such initiatives as those related to valuable recyclable materials enabled a year-

on-year reduction of approximately 12% (1,022 tons). The Group was able to greatly exceed its target for reducing zero

waste emissions (wastes disposed of as landfill or externally incinerated). Reflecting a two-month delay in the start-up of

newly installed exhaust gas treatment equipment, emissions of solvents and others exceeded the target level, but

exhaust gas treatment capacity was raised to the planned level by the end of fiscal 2003. CO2 emissions were reduced

by a greater amount than planned, due to proactive and persistent energy conservation efforts.

Fiscal 2003 results

13% over D 19

53% under A 19

59% over D 16

3% under A 17

A: Below target

B: 0% to 5% over target

C: 5% to 10% over target

D: More than 10% over target

Target comparison

Self-evaluation

Related pages

Amount of waste generated totaled 7,449 tons,

approximately 850 tons more than the target

Amount of zero waste emissions substances totaled

563 tons, approximately 640 tons less than the target

Emissions totaled 1,018 tons, approximately 380 tons

more than the target

CO2 emissions totaled 123,585 tons, approximately

3,900 tons less than the target

Environmental Accounting

9 Sumitomo Bakelite

Sumitomo Bakelite has adopted environmental accounting to promote more-efficient environmental management as well as to live up to its accountabilityto society.

In fiscal 2000, Sumitomo Bakelite introduced environmental accounting as an effective tool to implement business activ-

ities in line with the environment. Environmental accounting quantifies the costs and effects associated with environ-

mental conservation activities. It is an excellent tool to promote environmentally conscious business activities more

efficiently and to enhance the understanding of our efforts through the disclosure of information to our stakeholders.

With reference to Environmental Accounting Guidelines 2000, 2002 released by the Ministry of the Environment, we

established a framework for quantitatively measuring progress in our activities to help reduce the environmental burden.

Under the framework, we continuously make efforts to evaluate the environmental conservation activities based on our

own compilation methods. Moreover, we strive to enhance the effectiveness of our compilation methods through annual

reviews and reassessments.

In fiscal 2000, we introduced environmental accounting at five plants and two laboratories. From fiscal 2001, we

expanded the scope of environmental accounting to all of our domestic business facilities, including those of affiliated

companies (listed below).

Environmental Conservation Costs in Fiscal 2003

Item Investment Expenses Description(Millions of yen) (Millions of yen)

(A) Reduction of emissions into the environment 57 187• Renovation of wastewater-treatment equipment

• Construction of sewerage-use drainage paths

(B) Energy conservation 28 27• Introduction of co-generation system

• Maintenance of air conditioners

(C) Reduction of industrial waste, promotion 10 560

• Dismantling and removal of incinerators

of recycling and waste treatment • Waste treatment

(D) Product evaluation at R&D stage — 1,173 • R&D for environmentally friendly products

(E) Reduction of environmental burden — 17

• Consignment fee to the Japan Containers

upstream and downstream and Recycling Association

• Personnel costs for environmental manage-

ment activities(F) Environmental management activities 0 258

• Greening activities and maintenance of

green space

(G) Contributions to social activities — 1 • Activities for external communications

(H) Response to environmental damage — —

Total 95 2,223

Period: April 2003 through March 2004

Scope of Compilation: Sumitomo Bakelite Co., Ltd. (Amagasaki Plant, including subsidiaries and affiliated companies on the premises, Shizuoka Plant, including sub-

sidiaries and affiliated companies on the premises, Utsunomiya Plant, Tsu Plant, Fundamental Research Laboratory, and Kobe Fundamental

Research Laboratory), Akita Sumitomo Bakelite Co., Ltd., Artlite Kogyo Co., Ltd., Tokyo Kakohin Co., Ltd., Hokkai Taiyo Plastic Co., Ltd., Yamaroku

Kasei Industry Co., Ltd., and Kyushu Bakelite Industry Co., Ltd.


Compilation methods

• Compilations are based on the Company’s Environmental Accounting Compilation Guidelines with reference to

Environmental Accounting Guidelines 2000, 2002 released by the Ministry of the Environment.

• Regarding investments with multiple cost items, including those unrelated to environmental conservation objectives,

since fiscal 2002 environmental conservation costs have been compiled through proportional allocation of the environ-

mental conservation-related costs.

• Regarding economic effects, only effects calculable based on clear-cut grounds are recorded. Effects calculable

based on such presumptions as risk avoidance effects are excluded.

• Expenses do not include depreciation costs.

• With regard to R&D, investment outlays and expenses are compiled for each environment-related category.

• Fiscal 2003 sales of environmentally friendly products amounted to ¥13,117 million (up ¥5,105 million from fiscal

2002), accounting for approximately 13.3% of total non-consolidated net sales (up 4.9 percentage points from

fiscal 2002).

Effects of Environmental Conservation for Fiscal 2003

Environmental Burden

Reduction in atmospheric emissions 380 tons Atmospheric emissions of solvents and others 1,018 tons

of solvents and others

Reduction in CO2 emissions 3,584 tons CO2 emissions 123,585 tons

Reduction in industrial waste generated 1,022 tons Industrial waste generated 7,449 tons

Reductions in landfill and external incineration 1,850 tons Landfill and external incineration of waste 563 tons

of waste

Economic Benefits Effects for Fiscal 2003

Item Amount (Millions of yen)

(1) Reduction in costs due to energy conservation 42

(2) Reduction in costs by waste reduction 49

(3) Income from recycling 52

(4) Reduction in costs by internal recycling 290

(5) Reduction in costs by circulation of factory drain water 15

Total 448

Reduction in Environmental Burden(Compared with previous fiscal year)

Promotional Organization

11 Sumitomo Bakelite

Sumitomo Bakelite’s organization for environmental conservation and theassurance of safety and health

Sumitomo Bakelite follows the policy of Responsible Care for safeguarding the environment, safety, and health through-

out the full life cycle of chemical substances, from development to disposal. The Company has organized a Responsible

Care Committee, made up of members of top management. Implementation of Responsible Care is handled by a

Companywide organization that is centered around the head office and similar organizations at each office and facility

that act through environmental management units as well as other units with individual objectives.

Top Management

Responsible Care

Committee*

Environmental Management

Information Operation

Production Technologies

Companywide organization

Individual facility organization

Technology Development

Recycling

Environmental Management Activities

Environmental Management Division

Other ActivitiesUnits with individual objectives

[Technical Dept.,] Laboratories [S.B. Recycle] Co., Ltd.

� Environmental policy� Action plans� Internal audit� Waste reduction � Public relations� Management of

chemical substances� Occupational safety

and health

� Information collection � Energy conservation� Resource conservation

� R&D� Resource conservation� Chemical substance

safety management

� Development of recycling

technologies� Recovery of waste� Disposal of waste

[Environment, Safety] & Recycling Dept.**

[General Affairs Dept.]

[Personnel and] Labor Dept.

[S.B. Techno- Research Co., Ltd.] [Quality Assurance] Dept.

[SBTEG Co., Ltd.]

Notes: ** The Responsible Care Committee sets up plans and projects for Companywide Responsible Care activities and also considers and approves the activities of

individual facilities.

** The Environment, Safety & Recycling Dept. acts as the secretariat for Responsible Care activities and also coordinates the activities of individual facilities.

It provides:

• Administration and assistance for environmental maintenance and improvement and safety assurance at individual facilities

• Internal auditing of environment- and safety-related Responsible Care efforts at individual facilities. (Audits are conducted annually for domestic facilities and

once every three years for overseas facilities.)

• Support for attainment of ISO 14001 certification

• Handling of chemical substance safety in accordance with applicable laws and regulations

• Conducting of feasibility studies and planning of internal and external recycling activities


Environment-Conscious Products

SUMIKON® EME epoxy molding compound for semiconductorsSumitomo Bakelite has developed an epoxy resin forming material for semiconductor sealing thatuses no bromine- or antimony-based flame retardants with substantial impact on the environmentand is compatible with lead-free solder mounting. Using a newly developed epoxy resin with supe-rior combustion resistance, Sumitomo Bakelite has developed and begun marketing theSUMIKON® EME-G700 series for high-reliability applications as well as the SUMIKON® EME-G600and EME-G500 series for general-purpose packaging. Moreover, we have launched theSUMIKON® EME-E series of products specially designed for discrete applications. Leveraging ourmaterial design technologies for environmental impact reduction, we strive to reduce the burdenon the environment by offering a green product range that covers leading-edge semiconductorpackaging through general-purpose packaging.

SUMIRESIN EXCEL® CRM semiconductor die attach paste Among its high-reliability die attach paste products compatible with the higher mounting tempera-tures associated with lead-free soldering, Sumitomo Bakelite offers the SUMIRESIN EXCEL®

CRM-1076 series and CRM-1033 series of products for lead frame packages as well as the CRM-1500 series for area mounting. Our CRM-1300 series of die attach paste products contains nomutagens, while the superior thermal conductivity of our CRM-1290 series has enabled it to proveitself as a replacement for die attach materials that entail the use of solder.

SUMIRESIN EXCEL® CRC wafer coating material Due to the rapid increase in semiconductor memory capacity and demand for high-speedcompatibility, circuit widths have narrowed and demands for reliability have become ever moreexacting. To meet these demands, Sumitomo Bakelite has developed the CRC-8000 series ofpositive-type photosensitive wafer coating resins. This new series enables the use of alkalineaqueous solution as developing fluid and pure water as rinse fluid, eliminating the need for semicon-ductor manufacturers’ use of special solutions. Furthermore, a new use for the series has beendeveloped as an alternative to the traditional plastic sealing of certain wafer-level packages, thusenabling energy conservation by reducing the number of semiconductor manufacturing processes.

SUMIRESIN EXCEL® CRP liquid epoxy resin for semiconductors Sumitomo Bakelite’s SUMIRESIN EXCEL® CRP is an underfill resin for increasing the reliability offlip-chip connections and is compatible with lead-free solder. While lead-free solder is inferior toconventional solder in terms of mechanical strength, underfill resin securely holds and hardenslead-free solder between chips and circuit boards. SUMIRESIN EXCEL® CRP greatly increasesconnection reliability even in such severe conditions as those created by extreme temperaturecycles while being an outstanding product with regard to facilitating continuous work processes.

LOC Adhesive Film ITA semiconductor adhesive film/ Semiconductor Adhesive Film IBF

LOC Adhesive Film ITA and Semiconductor Adhesive Film IBF offer greater resist-ance to high temperatures than conventional adhesive films. They have been devel-oped and marketed as semiconductor adhesive film products compatible withlead-free solder reflow.

As one of the world’s leading plastic manufacturers, Sumitomo Bakelite strivesto develop and provide products that contain no hazardous or harmful sub-stances and entail no use of such substances in their manufacture, that do notrequire its customers to use such substances, and that are easily recyclableand whose constituent materials are easily recoverable.


SUMILITE® PLC, ELC, and APL (GS series) “green” laminatesSumitomo Bakelite has developed and now markets its GS series of halogen- and antimony-freeenvironment-friendly laminates for use as electric circuit boards. The series consists of a full range ofgrades, from paper phenol material for single-sided boards to materials for semiconductor packagesubstrates. We have also developed materials compatible with lead-free-solder, double-sided reflowmounting and have become the first in the world to initiate mass production of these materials.

SUMILITE® TFP flexible printed circuit boards (PCBs)Sumitomo Bakelite has developed and currently sells environmentally friendly halogen- andantimony-free flexible PCBs and an epoxy adhesive for use in flexible copper laminates and coverlays as well as environmentally friendly PCBs that use lead-free solder plating on connector termi-nals and surface mounting. Furthermore, in addition to our traditional single- and dual-sided flexi-ble PCBs, we have developed and now market halogen- and lead-free environmentally friendlymultilayer flexible PCBs.

SUMIZAC® SZF solder-replacing curing films Sumitomo Bakelite’s SUMIZAC® SZF is a lineup of curable anisotropic conductive films that pro-vide an alternative to solder for circuit electrode connection. Since these films enable the one-stopconnection of minute circuits, they have become indispensable for connecting glass panels to cir-cuit boards in flat panel displays, which are rapidly growing in size and clarity of definition. Theyalso eliminate the need for solder reflow and enable shorter work time and lower temperatures inthe connection of ICs and electronic components to circuit boards. We are also working to devel-op acrylic resin-based non-mutagenic materials.

SUMILITERESIN® ECP epoxy coating powder for electronic components Having developed electronic component use epoxy coating powder products that enable lead-free laser marking, Sumitomo Bakelite has completely eliminated the use of lead in these prod-ucts. We have also developed and begun marketing halogen- and antimony-free epoxy coatingpowder products. Moreover, we have developed and launched electronic component use epoxycoating powder products that harden in half the time of conventional products and offer high relia-bility. The reduced hardening time enables heat energy conservation and higher manufacturingproductivity. To realize even greater environmental friendliness, we are proceeding with the devel-opment of coating powder products that harden at lower temperatures.

SUMIMAC® ECR liquid epoxy resin for electric and electronic componentsSumitomo Bakelite has developed and now markets liquid epoxy resin for SMD components thatare compatible with lead-free solder mounting as well as environment-friendly halogen- and anti-mony-free products. Furthermore, to enhance the connective reliability of BGAs and PCBs (moth-erboards), we have newly developed low-temperature quick-curing liquid epoxy resin for use as asecondary mounting underfill material that contributes to energy conservation and does notrequire cold storage.

SUMILITE® CSL semiconductor cover tape for electric and electronic componentsSUMILITE® CSL cover tape has been developed and marketed to protect electric and electroniccomponents from static electricity. In addition to adding electrical conductivity to the layer con-nected to carrier tape, it is an environmentally friendly, halogen-free product.

SUMILITERESIN® PR phenolic resinsLeveraging catalytic and reaction technologies, Sumitomo Bakelite has developed and begunmarketing environmentally sound phenolic resins that are friendly to both the global environmentand the work environment and fulfill the requirements of the PRTR Law, the Industrial Safety andHealth Law, and the Poisonous and Deleterious Substances Control Law. Products in the lineupinclude resins with extremely low levels of unreacted monomers and dimer content, completelyaqueous low-monomer types that contain no organic solvents, and dust-free powder resins withan extremely low-level emission of dust particles.

SUMIKON® PM sprue-free and runner-free phenolic resin molding compoundsMaking the most of the superior heat resistance, dimensional characteristics, and mechanicalstrength of phenolic resins, Sumitomo Bakelite supplies phenolic resin molding compounds fordiverse structural component applications related to automobiles and other products. They haveenabled the plasticization and modularization of brake pistons, pulleys, and other metal auto-mobile components, thereby contributing to vehicle weight reduction along with improved fuelefficiency and lower CO2 emissions. We also operate a material recycling system that reuses by-products of molding processes and are developing sprue-free and runner-free formingtechnologies that reduce the volume of such by-products generated.

P-Plus® freshness maintenance filmSumitomo Bakelite has developed P-Plus® freshness maintenance film to help preserve the qualityof fruit and vegetables during their distribution and storage. The film’s quality maintenance capa-bility enables the reduction of loss due to spoilage at each stage of the distribution process. It alsohelps reduce the environmental burden by enabling a reduction in the number of shipments tostores and by facilitating the use of cardboard boxes and containers, which are easier to recyclethan polystyrene containers.

SUMILITE® OBL polyethylene shoe tree blocksSumitomo Bakelite has established a resource recycling system for manufacturing SUMILITE®

OBL polyethylene shoe trees made from used shoe trees obtained from customers as well aspolyethylene block shavings and filings generated in the course of customers’ manufacturingprocesses. Reflecting this, we received an award for promoting the “reduce, reuse, and recycle”policy from Japan’s Ministry of Economy, Trade, and Industry (METI) in 2002.

MYKITCHEN® polyethylene chopping boards Sumitomo Bakelite has established a resource recycling system for recovering MYKITCHEN® poly-ethylene chopping boards from customers for use in manufacturing such other products as plantersand civil engineering use pipe pilings as well as in its HEALTHY ELEVEN® floor mat products.

SUMIHAT® FAV organic PVA fiber safety helmetsSumitomo Bakelite has developed and marketed fiberglass-free FRP safety helmets and estab-lished a system for their thermal recycling.



Note: Figures are for the facilities and companies listed on page 4. Note: Figures are for the facilities and companies listed on page 4. Note: Figures are for the facilities and companies listed on page 4.

Sumitomo Bakelite strives to reduce the volume of substances impacting the envi-ronment that are released into both the air and water in the course of manufacturingoperations.

Reduction of Environmental Impact Substances

Air

Sumitomo Bakelite observes domestic emissions standards as well as standards based on agreements with local com-

munities on SOx emissions and other soot particles emitted by boilers and other installations. In addition, in fiscal 2003,

the Company installed a natural-gas-fueled co-generation system at the Shizuoka Plant. This plant accounts for approx-

imately 50% of the Group’s total domestic energy consumption, and measures are being taken to utilize the new co-

generation system to further reduce the Group’s total emissions of SOx, NOx, as well as soot and dust.

Activated sludge treatment equipment(Shizuoka Plant)

Water recirculation equipment(Amagasaki Plant)

Note: COD: When the oxidizing agent potassium

permanganate oxidizes organic matter in

water, it alters the amount of consumable

oxygen volume, which is used as an indica-

tor of organic matter pollution in water.

235 238212

239

210

1999

2000

2001

2003

2002

0

100

200

300

(FY)

(Tons) SOx emissions

6.3

2.3 2.31.6

1.2

1999

2000

2001

2003

2002

0

2

4

6

8

Soot and dust emissions

(FY)

(Tons)

5356

6467

52

1999

2000

2001

2003

2002

0

20

40

60

80

NOx emissions

(FY)

(Tons)

Water

Water discharged from manufacturing plants consists primarily of wastewater from operational processes and human

use and rainwater (including cooling water). Sumitomo Bakelite strives to conserve water resources and reduce water

release by recirculating cooling water.

As for wastewater, we operate treatment installations, including high-precision phenol collection units, activated

sludge treatment equipment, and neutralizing agglutinate precipitation units (metal disposition). Having established a

constant monitoring system employing surveillance equipment, we are striving to maintain rigorous compliance with

domestic wastewater standards and local agreements on pollution prevention.

27.028.9

26.528.3

25.9

1999

2000

2001

2003

2002

0

10

20

30

Chemical Oxygen Demand (COD)

(FY)

(Tons)

Note: Figures are for the facilities and companies listed on page 4.


* Based on the PRTR Law, by ascertaining their emissions of various harmful chemical substances, companies handling these substances are urged to improve their own

independent controls in order to forestall any hindrances to environmental conservation.

Reduction of emissions of solvents and others

As a member of the JCIA, Sumitomo Bakelite has been engaged since 1996 in

PRTR activities aimed at measuring emissions and transfers of substances covered

by the JCIA, and the Company has set medium- and long-term targets that place

particular emphasis on progressively reducing emissions of solvents and other pollu-

tants into the atmosphere. The accompanying graph shows such emissions since

fiscal 1999. In fiscal 2003, we achieved an approximately 27% (380 tons) year-on-

year reduction in these emissions, while emissions of substances covered by

the PRTR Law amounted to 236 tons, a drop of almost half from fiscal 2002.

Our emissions and transfers of 33 substances covered by the PRTR Law

are listed in the table below.

Emission and Transfer Volumes of Substances Subject to the PRTR Law* (Fiscal 2003 actual results)(Tons/year)

GovernmentSubstance

Amount used Amount released Amount transferredorder no. (manufactured) Into air Into water Into soil As waste matter Into sewers

1 Zinc compounds (water-soluble) 40 0 0 0 0.6 015 Aniline 117 0 0 0 0 025 Antimony and its compounds 168 0 0 0 10 029 Bisphenol A 442 0 0 0 0 030 Bisphenol A-type epoxy resin (liquid) 974 0 0 0 0 043 Ethylene glycol 819 0 0 0 2.2 044 Ethylene glycol monoethyl ether 17 0 0 0 0 045 Ethylene glycol monomethyl ether 245 156 0 0 4.2 063 Xylene 55 17 0 0 0.9 064 Silver and its water-soluble compounds 10 0 0 0 0 067 Cresol 1,249 0 0 0 0 0

129 Diuron 1 0 0 0 0 0172 N,N-dimethyl formamide 489 11 0 0 3.8 0176 Organic tin compounds 23 0 0 0 0.5 0177 Styrene 12 0.7 0 0 0 0198 Hexamethylenetetramine 1,178 0 0 0 16 0202 Tetrahydromethylphthalic anhydride 96 0 0 0 0 0207 Copper salts (water soluble, except complex salts) (77) 0 0.3 0 0 0224 1,3,5-trimethylbenzene 3 0 0 0 0 0227 Toluene 401 47 0 0 6.2 0232 Nickel compounds 2 0 0 0 0 0242 Nonylphenol 2 0 0 0 0 0243 Barium and its water-soluble compounds 49 0 0 0 0 0266 Phenol 25,031 2.7 0 0 18 0270 Di-n-butyl phthalate 8 0 0 0 0 0272 Bis (2-ethylhexyl) phthalate 26 0 0 0 0.6 0299 Benzene (2) 0 0 0 2.5 0300 1,2,4-benzenetricarboxylic 1,2-anhydride 15 0 0 0 1.4 0304 Boron and its compounds 20 0 0 0 0.3 0

310 Formaldehyde10,854 1.2 0.1 0 6.8 0(16,726) 0 0 0 0 0

313 Maleic anhydride 2 0 0 0 0 0340 4,4´-methylenedianiline 2 0 0 0 0 0354 Tri-n-butyl phosphate 4 0 0 0 0 0

Class I Designated chemical substances

Exhaust gas treatment equipment


1999

2000

2001

2004

(plan

ned)

2003

2002

0

1,000

2,000

3,000

4,000

1,2151,008 900

450 236 130

1,949 2,3121,904

948782

3,1643,320

2,804

1,3981,018

270400

(FY)

(Tons) Emissions of solvents and othersSubstances not subject to the PRTR Law

Substances subject to the PRTR Law


Sumitomo Bakelite implements energy conservation activities and strives toreduce CO2 emissions.

The reduction of greenhouse gases is required to help achieve a solution to global warming, a worldwide environmental

issue of the greatest concern. To reduce emissions of the greenhouse gas CO2, the Sumitomo Bakelite Group strives to

conserve energy by the following three means:

1 Prevention of wasteful use of energy by all employees

2 Promotion of energy-conserving production by rearranged producing processes

3 Adoption of new energy conservation technologies and equipment

Currently, in addition to reductions achieved through the introduction of a co-generation system, we are striving to

make further progress in energy conservation with the long-term objective of reducing CO2 emissions by 14.6% from

the fiscal 1999 level by fiscal 2010.

In fiscal 2003, steady progress in energy conservation programs at each Group facility enabled a drop in CO2 emis-

sions to 2.8% below the fiscal 2002 level, or 5.5% below the fiscal 1999 level.

Principal energy conservation measures implemented in fiscal 2003 were:

1 Introduction of inverter controllers for such equipment as pumps, fans, and compressors

2 Introduction of partitions for such spaces as refrigerated containers and air-conditioned rooms

3 Introduction of water cooling for external air-conditioner units

4 Recovery of steam from steam drains

5 Elimination of unneeded steam conduits

6 Repairs of steam and air leakage sites

7 Adoption of energy-saving lighting fixtures

8 Optimization of facility operation conditions

9 Optimization of air-conditioning conditions

0 Installation of heat-rejection sheets

CO2 Emissions and Energy Conservation

69,279 68,54362,155

67,39362,364 56,220

(Target)

1999

2000

2001

2003

2010

2002

0

40,000

20,000

60,000

80,000

0.69 0.680.73 0.77

0.68

0.00

0.60

0.40

0.20

0.80

1.00

(FY)

(kr/¥ million)(Crude oil equivalent, kr)

Energy usage/Consumption rate*

130,769 128,462116,187

127,169 123,585 111,700(Target)

1999

2000

2001

2003

2010

2002

0

90,000

60,000

30,000

120,000

150,000

1.30 1.28 1.361.46

1.34

0.00

1.20

0.80

0.40

1.60

2.00

(FY)

(Tons/¥ million)(Tons) CO2 emissions/Emission rate*

* The consumption rate is calculated as consumption per evaluatedproduction unit as follows: consumption per output unit = energyconsumption / (production volume x sales unit value)


* The emission rate is calculated as emissions per evaluated produc-tion unit as follows: emissions per output unit = CO2 emissions /(production volume x sales unit value)



Inverter controller for process fan of waste gas combustion unit

The amount of electric power and fuel used by the exhaust gas treat-

ment unit of an impregnating machine was reduced by providing for

processing stream volume to be adjusted in line with exhaust gas

volume. (Shizuoka Plant)

Water cooling for external air-conditioner units

The introduction of water cooling for external air-conditioner units has

made it possible to control the rise of coolant gas pressure, thereby

reducing electric power consumption. (Tsu Plant)

Partitions for air-conditioned rooms

Rather than air-conditioning entire rooms, vinyl curtain partitions have

been installed to focus the flow of air on spaces where it is required

for quality control purposes, thereby reducing electric power con-

sumption. (Akita Sumitomo Bakelite Co., Ltd.)

Heat-rejection sheets

The placement of translucent blue plastic sheets over walls and win-

dows has created air buffer areas that insulate facilities from external

heat sources, thereby increasing air-conditioning efficiency.

(Amagasaki Plant)

Introduction of co-generation system

In fiscal 2003, Sumitomo Bakelite installed a co-generation system in its Shizuoka Plant with support from the New

Energy and Industrial Technology Development Organization (NEDO), which subsidizes efforts by businesses to rational-

ize their energy usage. Pilot operation of the system was initiated in mid-July 2004, and it is currently operating smooth-

ly. The system generates electric power with a liquefied natural gas fueled turbine, while the turbine’s waste heat is used

to generate steam that is employed to further boost the efficiency of electric power generation, thereby making it possi-

ble to reduce CO2 emissions. Based on the NEDO-certified project plan, the system will decrease CO2 emissions by

11,000 tons per year, a volume corresponding to 8.9% of the total emissions of the Group’s domestic facilities in fiscal

2003.

Co-generation system (Shizuoka Plant)


The Sumitomo Bakelite Group strives to reduce the amount of waste generatedand achieve zero waste emissions.

The Sumitomo Bakelite Group is giving priority to reducing waste generation by increasing production yields and recy-

cling waste materials during manufacturing processes. We are also aiming to recycle all waste generated, rather than

using landfill or simple incineration, thereby achieving zero waste emissions.

The graphs below illustrate progress in the reduction of waste generation and zero waste emissions efforts as well as

the target figures. We have steadily reduced our waste generation since fiscal 2000 by increasing production yields,

recycling wastes, and converting wastes into valuable resources. In fiscal 2003, we achieved a year-on-year waste

reduction of approximately 1,000 tons (down 12% from fiscal 2002). We also reduced the wastes covered by our zero

waste emissions programs by approximately 1,900 tons (down 77% from fiscal 2002) through both internal and external

recycling and valuable resource conversion. Our goal is to achieve zero waste emissions by fiscal 2005.

Waste Disposal19

99

2000

2001

2003

2004

2005

2006

2002

0

3,000

6,000

9,000

12,000

15,000

5,747

12,800

1,916

5,137

6,580

13,265

1,877

4,808

4,788

10,416

1,582

4,046

5,437

8,471

621

2,413

6,886

7,449

0563

5,900

6,300

0400

4,4003,740

00

00

(Target values)

(FY)

External recycling (expenses paid)Internal incinerationLandfill and external incineration

(Tons) Amount of waste generated

5,137 4,8084,046

2,413

563 400 0 0

1999

2000

2001

2003

2004

2005

2006

2002

0

3,000

6,000

9,000

12,000

15,000

(Target values)

(FY)

(Tons) Zero emissions (Amount of targeted substances)

Note: Figures are for facilities listed on page 4.

Waste products included in figures consist of waste disposed of

as landfill, externally and internally incinerated waste, and exter-

nally recycled waste (expenses paid).

Note: Figures are for facilities listed on page 4.

Substances covered by zero emissions programs include waste

disposed of as landfill and waste that is incinerated externally.

Zero Emissions Achieved at Three Plants

In fiscal 2003, the plants of Yamaroku Kasei Industry Co., Ltd., and Kyushu Bakelite Industry Co., Ltd., as well as the

parent company’s Amagasaki Plant were recognized within the Group as zero emissions facilities. Each of the facilities

attained the zero emissions facility status by sorting its waste products into finely defined categories of materials and

finding routes for the recycling of each category of waste. The following sections present the views

of zero emissions promotion staff at two of the zero emissions facilities.

Kyushu Bakelite Industry Co., Ltd.

“Our company manufactures epoxy resin molding compounds for use with semiconductors. We attained zero

emissions status through such initiatives as those to transform waste materials generated in the course of our

manufacturing processes into raw materials for manufacturing cement; internally recycle waste acetone; and

thermally recycle other waste products. Waste sorting is a fundamental part of zero emissions programs, andSusumu Yamane,

General AffairsDepartment


we have increased consciousness of the importance of sorting and recycling through such measures as the placement of signs

explaining post-sorting processing methods and the introduction of a beverage container deposit payment system for products dis-

pensed by vending machines. We are currently working on various projects—such as one aimed at using shredded paper for com-

posting cow manure and another aimed at transforming the sacks used for transporting raw material into useful products—and we

expect to continue helping make Japan a truly recycling oriented society.”

Elimination of dioxins

Depending on combustion conditions, waste incinerators may generate dioxins. The Law Concerning Special Measures

against Dioxins and the revised Waste Disposal and Public Cleaning Law have made regulations governing incinerators

more stringent, and Sumitomo Bakelite had shut down or suspended operations at all of its incinerators by November

30, 2002. Since then, the dismantling and removal of the incinerators has proceeded steadily, and the removal of 11 of

12 incinerators had been completed by August 2004.

A bulletin board in the Zero Emissions Office

Equipment used to refund beverage container deposits

A scrap recycling station A recycling bin for fluorescent light bulbs

Amagasaki Plant

“It goes without saying that sorting waste into narrowly defined categories is crucial for promoting progress in

zero emissions, but increasing and establishing a consciousness of the importance of sorting requires consid-

erable time. We have had to work resolutely and relentlessly to correct such simple but recurrent problems as

the disposal of heterogeneous types of waste plastic mixed together, the placement of properly sorted waste

in the wrong recycling location, and the mislabeling of properly sorted waste. But, at this point, we have incul-

cated a pervasive consciousness that waste products are resources rather than trash, and we are pleased to

see that compliance with sorting rules is now the standard practice. As the next stage in zero emissions, I

believe it important to work assiduously to promote a drop in the volume of waste products that are generated.”

Seio Nishi, EnvironmentalAdministration

Section


Recycling

Sumitomo Bakelite proactively uses recycling to make the most effective use ofresources.

Regarding recycling initiatives, for many years, Sumitomo Bakelite has been pulverizing phenolic resin copper-clad

laminates and melamine resin decorative laminates and using the powder as filler in phenolic resin molding compounds

as well as using re-pelletized sprue, runner, and other waste plastic

from molded products as raw materials.

Some of Sumitomo Bakelite’s other recycling initiatives include:

• Use of circuit etching waste liquid (copper chloride) as a base material

for ship bottom paint

• Reuse of epoxy resin molding products as raw material and fuel

for cement

• Use of reactive waste liquid in raw fuel for cement (for caloric adjustment)

• Use of recovered methanol as boiler fuel

• Distillation, recycling, and reuse of waste acetone

• Reuse of waste isopropyl alcohol

• Recovery and recycling of used plastic shoe trees

• Use of paper and plastic scrap as refuse-derived fuel

• Use of film sheet discard in trays, mats, planters, etc.

• Recovery of copper from organic and inorganic sludge

• Separation and recovery of metal and plastic materials from plastic

molded products with metal attachments

To improve recycling efficiency, in 1992, we established the sub-

sidiary S.B. Recycle Co., Ltd., whose missions are to research recy-

cling technologies and the reuse of by-products and to build waste

collection and processing systems for the Group and its customers.

The subsidiary is also conducting research into wastewater treat-

ment systems for phenol resin dehydrate using biodegradation.

Recycling system for phenolic resin molding compound

Together with the collection of powder generated

during molding production, a manufacturer engaged

in molding generates sprue, cull, and runner as by-

products. Sumitomo Bakelite has established a recy-

cling system that converts these by-products into raw

material and fuel for cement plants and also pulverizes

some of them for reuse as polishing materials. We

are also conducting research into the chemical recy-

cling of thermoset resin molding materials using super-

critical technologies.

Raw material

Molding compounds

Blending

Kneading

Pulverizing

Pulverizing

Sumitomo Bakelite

Molding companies

Companies that use by-products

Waste by-productsMolded products

� Automobile components

� Breakers

Molding companiesPolishing materials

Cement companiesRaw material in the kiln firing of cement clinker

Reconversion to raw material

Reclamation to raw material

Molding machinery

� Sprue� Cull� Runner

Production of molding compounds

Equipment for distilling and recovering acetone

A pulverizer used for separatingand recovering materials fromplastic molded products with

metal attachments


Sumitomo Bakelite conducts investigations of soil and groundwater contamination.

Soil and Groundwater Contamination Investigations

The following table contains the results of soil and groundwater investigations conducted at each office and facility. As

of these investigations, no contaminants that exceeded the limits set by environmental standards have been detected.

Site Investigation item Result1 Comments

Fundamental Research Groundwater 1,1,1-trichloroethane A 12/1998Laboratory Trichloroethylene A

Tetrachloroethylene A

Soil 1,1,1-trichloroethane A 5/2004Trichloroethylene ATetrachloroethylene A1,2-dichloroethane ADichloromethane A

Amagasaki Plant Groundwater 1,1,1-trichloroethane A 9/2003Trichloroethylene ATetrachloroethylene ACarbon tetrachloride A1,1-dichloroethylene ACis-1,2-dichloroethylene *

Soil Cadmium and its compounds A 11/2000Lead and its compounds AHexavalent chromium compounds AArsenic and its compounds AMercury and its compounds A

Shizuoka Plant Groundwater 24 substances covered by environmental standards 2 A 5/2003

Soil Trichloroethylene A 2/1999

Utsunomiya Plant Groundwater Trichloroethylene A 5/2000and soil

Tsu Plant Groundwater 23 substances covered by environmental standards A 2/2000

Soil 25 substances covered by environmental standards3 A 2/2000

Yamaroku Kasei Industry Groundwater 22 substances, including trichloroethylene A 1/2002

Co., Ltd. Soil Phenols A 10/2001

Akita Sumitomo Bakelite Groundwater Total cyanide, lead, copper, soluble manganese, A 7/2001Co., Ltd. phenols, cis-1,2-dichloroethylene, A

1,1,1-trichloroethane, tetrachloroethylene, Adichloromethane, trichloroethylene A

Soil Cyanide A 8/2000Phenols ACopper AManganese An-hexane extract A

(Former Sano Plastic Groundwater Trichloroethylene A 7/1998Co., Ltd.)

Notes: 1. “A” marks indicate that limits set by environmental standards have been cleared or, in the case of substances for which environmental standards have not been

set, that the minimum measurable amount was not detected.

2. Cadmium, total cyanide, lead, hexavalent chromium, arsenic, total mercury, dichloromethane, carbon tetrachloride, 1,2-dichloroethane, 1,1- dichloroethylene,

cis-1,2-dichloroethylene, 1,1,1-trichloroethane, 1,1,2-trichloroethane, trichloroethylene, tetrachloroethylene, 1,3-dichloropropene, thiuram, simazine, thiobencarb,

benzene, selenium, nitrate nitrogen and nitrite nitrogen, fluorine, and boron

3. Cadmium, total cyanide, organic phosphorus, lead, hexavalent chromium, arsenic, total mercury, alkyl mercury, PCBs, copper, dichloromethane, carbon tetra-

chloride, 1,2-dichloroethane, 1,1-dichloroethylene, cis-1,2-dichloroethylene, 1,1,1-trichloroethane, 1,1,2-trichloroethane, trichloroethylene, tetrachloroethylene,

1,3-dichloropropene, thiuram, simazine, thiobencarb, benzene, selenium

Investigationdate

Although 0.13mg/l of cis-1,2-dichloro-

ethylene was detected (environmental stan-

dard: 0.04mg/l), a municipal investigation

found the cause to be upstream of the plant.

At a site near an outdoor hazardous material

storage facility, 230mg/kg of copper was

detected (2/2000) (environmental standard:

125mg/kg), but this is presumed to have

leaked during processing of waste oil con-

taining copper. Subsequent investigations

detected only 67mg/kg (7/2002), 62mg/kg

(6/2003), and 20mg/kg (7/2004).


The tables below provide environmental impact data related to air quality andwater quality for each individual Sumitomo Bakelite site in Japan.

Site-Specific Environmental Impact Data—Domestic Facilities

Amagasaki Plant

(Air)Facility Item Unit Regulatory limit Measured data

SOx m3N/h 2.93 0.14

Boiler NOx ppm 250 61.3

Soot and dust g/m3N 0.3 0.04

(Water)Item Unit Regulatory limit Measured data

pH — 5.8–8.6 7.0-7.8

BOD mg/r 25 10.2

COD mg/r 25 6.5

Suspended substances mg/r 20 2.8

n-hexane extract mg/r 20 1.0

Utsunomiya Plant


Drying SOx m3N/h 1.22 0.03

furnace Soot and dust g/m3N 0.2 Less than 0.001


pH — 5.8–8.6 7.5–7.8

BOD mg/r 25 1.7

COD mg/r 25 3.9

Suspended substances mg/r 25 Less than 1

n-hexane extract mg/r 5 Less than 1

Fundamental Research Laboratory

(Air)No relevant facilities


pH — 5–9 7.3–7.4

Copper mg/r 3 0.06

Soluble iron mg/r 10 0.2

Nickel mg/r 1 Less than 0.05

Shizuoka Plant


SOx m3N/h 17.72 12.0

Boiler NOx ppm 140 100



pH — 5.8–8.6 6.7–7.6

BOD mg/r 15 2.8

COD mg/r — 5.4



Phenols mg/r 1 Less than 0.2

Formaldehyde mg/r 5 0.8

Tsu Plant



pH — 5.8–8.6 6.8–7.6

BOD mg/r 130 19

COD mg/r 130 20

Suspended substances mg/r 130 27


Copper mg/r 1 Less than 0.05

Total chromium mg/r 2 Less than 0.05

Zinc mg/r 5 0.25

Soluble iron mg/r 10 0.12

Soluble manganese mg/r 10 Less than 0.05

Total nitrogen mg/r 60 23.0

Total phosphorus mg/r 8 2.30

Kobe Fundamental Research Laboratory



pH — 5–9 7.2–7.6

BOD mg/r 2,000 12

COD mg/r — 11

Suspended substances mg/r 2,000 20

n-hexane extract mg/r 5 Less than 1.0


Zinc mg/r 0.7 0.01


Akita Sumitomo Bakelite Co., Ltd.


SOx m3N/h 10.5 1.12


Soot and dust g/m3N 0.09 Less than 0.01


pH — 6.0–8.5 6.8–7.4

BOD mg/r 30 14

COD mg/r 30 8.8


Phenols mg/r 0.5 Less than 0.01

Copper mg/r 1.0 0.63

Cyanide mg/r 0.1 Less than 0.01

Lead and lead compounds mg/r 0.1 Less than 0.01

Soluble manganese mg/r 5 Less than 0.03

Tokyo Kakohin Co., Ltd.



pH — 5.8–8.6 7.1–8.6

BOD mg/r 20 6.7

COD mg/r — 8.8





pH — 5.8–8.6 7.3–7.6

BOD mg/r 30 8.9

COD mg/r 20 9.3

Suspended substances mg/r 20 Less than 5

n-hexane extract mg/r 2 Less than 1

Artlite Kogyo Co., Ltd.


SOx m3N/h 4.86 0.01




pH — 5.8–8.6 6.5–8.2

BOD mg/r 160 4.6

COD mg/r 30 12.5



Phenols mg/r 5 Less than 1

Yamaroku Kasei Industry Co., Ltd.



pH — 5.8–8.6 7.2–7.4

BOD mg/r 25 1.2

COD mg/r 25 3.0



Notes: 1. Regarding facilities related to air quality, when there are multiple facilities subject to regulations, the facility producing the largest volume of gas emissions is listed.

2. Regarding limits placed by the various regulations stipulated by prefectural ordinances, community agreements, and administrative guidance, the most rigorous

are listed.

3. For actual measurements, the largest figures for fiscal 2003 have been listed. For pH measurements, the range from smallest to largest is listed.

4. Actual measurements that are listed as “less than” indicate a measurement smaller than the lowest measurable value.


The tables below provide environmental impact data related to air quality andwater quality for each individual Group company site overseas.

Site-Specific Environmental Impact Data—Overseas Facilities

Sumitomo Bakelite Singapore Pte. Ltd. (Singapore)



pH — 6–9 6.1–6.9

BOD mg/r 400 180

COD mg/r 600 250


Phenols mg/r 0.5 0.5

Temperature C° 45 26.7

Chlorine mg/r 1,000 30

Hydrosulfate mg/r 1,000 38

Sulfur mg/r 1 0.01

Cyanide compounds mg/r 2 0.001

Linear alkylate sulphonate mg/r 30 2

Oil and grease mg/r 60 2

Arsenic and its compounds mg/r 5 Less than 1

Barium mg/r 10 Less than 1

Tin mg/r 10 Less than 1

Soluble iron mg/r 50 1

Beryllium mg/r 5 Less than 1

Boron mg/r 5 Less than 1

Soluble manganese mg/r 10 Less than 1

Cadmium mg/r 1 Less than 0.1

Trivalent chromium mg/r 5 Less than 0.1

Hexavalent chromium mg/r 5 Less than 0.1

Copper mg/r 5 Less than 1

Lead mg/r 5 Less than 1

Mercury mg/r 0.5 Less than 0.1

Nickel mg/r 10 Less than 1

Selenium mg/r 10 Less than 1

Silver mg/r 5 Less than 1

Zinc mg/r 10 Less than 1

P.T. Indopherin Jaya (Indonesia)


NOx ppm 0.05 0.01

SO2 ppm 0.1 0.001

Soot and dust mg/m3N 0.26 0.24

Generator NH3 ppm 2 0.16

CO ppm 20 0.97

H2S ppm 0.03 0.002

Ox ppm 0.1 0.06


pH — 6–9 7–8

BOD mg/r 100 23.8

COD mg/r 300 55.2


Total nitrogen mg/r 30 1.9

Phenols mg/r 1 0.08

SNC Industrial Laminates Sdn. Bhd. (Malaysia)


Exhaust gasSOx g/m3N 0.2 0.0120

combustionNOx g/m3N 2.0 0.1060

unitSoot and dust g/m3N 0.4 0.0201

Formaldehyde g/m3N — 0.6100


pH — 5.5–9.0 6.8–9.0

BOD mg/r 50 45

COD mg/r 100 95


Phenols mg/r 1.0 Less than 0.1

Temperature C° 40 30

Mercury and its compounds mg/r 0.05 Less than 0.02

Cadmium and its compounds mg/r 0.02 Less than 0.02

Hexavalent chromium compounds mg/r 0.05 Less than 0.05

Arsenic and its compounds mg/r 0.10 Less than 0.05

Cyanide compounds mg/r 0.10 Less than 0.05

Lead and its compounds mg/r 0.5 0.1

Trivalent chromium compounds mg/r 1.0 Less than 0.1

Copper mg/r 1.0 0.1

Soluble manganese mg/r 1.0 0.1

Nickel mg/r 1.0 0.1

Tin mg/r 1.0 Less than 0.1

Zinc mg/r 1.0 0.6

Boron mg/r 4.0 Less than 0.2

Soluble iron mg/r 5.0 0.9

Chlorine mg/r 2.0 Less than 0.1

Sulfur mg/r 0.50 Less than 0.4

Oil and grease mg/r 10.0 5


Fers Resins, S.A. (Spain)


SOx mg/m3N 4,300 Not detected

Generator NOx ppm 300 83.9

CO ppm 500 0.14


pH — 6–10 7.7–9.9

COD mg/r 1,500 537


Phenols mg/r 2 1.36

Formaldehyde mg/r — Not detected

Conductivity µs/cm 5,000 2,520

Total chlorine mg/r 2,000 328

Total sulfide mg/r 5 1

Total phosphorus mg/r 50 Not detected

Sumitomo Bakelite (Taiwan) Co., Ltd. (Taiwan)



pH — 6–9 7.5–7.6

BOD mg/r 300 130

COD mg/r 600 324


N.V. Sumitomo Bakelite Europe S.A.


Boiler NOx mg/m3N 425 217


ppH — 6–9 6.4–7.5

BOD mg/r — Less than 5

COD mg/r 136 Less than 20

Suspended substances mg/r 1,000 Less than 8

TOC mg/r 50 1.3

Phenols mg/r 3 Less than 1

Chlorendic acid mg/r 3 Less than 0.1

Hexachloro-cyclopentadiene mg/r 0.005 Less than 0.005

Monochloro-benzene mg/r 5 Less than 1

Total nitrogen mg/r 15 Less than 1.7

Total phosphorus mg/r 3 0.22

SB Flex Philippines, Inc. (Philippines)



pH — 6.5–9.0 6.8–7.3

BOD mg/r 500 469

COD mg/r 800 645


Sumitomo Bakelite Vietnam Co., Ltd. (Vietnam)


CO mg/m3N 500 225

BoilerNOx mg/m3N 1,000 74

SOx mg/m3N 500 277

Soot and dust mg/m3N 400 141


pH — 5.5–9 6.2–8.2

BOD ppm 50 46

COD ppm 100 79

Suspended substances ppm 100 64

Copper ppm 1.0 0.997

Lead ppm 0.5 0.337

Nickel ppm 1.0 0.48

Soluble iron ppm 5.0 0.52

Notes: 1. Regarding facilities related to air quality, when there are multiple facilities

subject to regulations, the facility producing the largest volume of gas

emissions is listed.

2. Regarding limits placed by the various regulations stipulated by laws and

regulations, community agreements, and administrative guidance, the

most rigorous are listed.

3. For actual measurements, the largest figures for fiscal 2003 have been

listed. For pH measurements, the range from smallest to largest is listed.

4. Actual measurements that are listed as “less than” indicate a measure-

ment smaller than the lowest measurable value. Actual measurements

that are listed as “not detected” indicate a measurement smaller than the

lowest detectable value.


Chemical Product Safety, Audits, Education, and Training

Environmental and safety auditsconducted by the Environment,Safety & Recycling Dept.

Material Safety Data Sheets (MSDSs)

An MSDS provides significant information to ensure the safe use and handling of chemical

substances and products. The enactment of the PRTR Law and the revision of the Industrial

Safety and Health Law and the Poisonous and Deleterious Substances Control Law have

made the provision of MSDSs a legal obligation. Sumitomo Bakelite has always drawn up

and distributed MSDSs based on JCIA guidelines. However, with the revision of these laws

as well as the adoption of the JIS Z 7250 for the preparation of MSDSs, we revise our

MSDS procedures at regular intervals (once every two years). For products that are export-

ed, we are working to prepare MSDSs in the local language as well as provide information

pertaining to applicable local laws and regulations. We also

demand MSDSs for all raw materials that we purchase. These

MSDSs are made constantly available to the site where these

materials are handled, and MSDS-based safety education is pro-

vided for all employees involved.

Yellow cards (emergency contact cards)

To ensure safety during transport, drivers carry “yellow cards” at all times. These cards con-

tain information about emergency measures and contacts.

Environmental and safety audit

Since 1973, Sumitomo Bakelite has been implementing annual environmental and safety auditing of its facilities through

the Environment, Safety & Recycling Dept. In 1978, the scope of these audits was expanded to include domestic affili-

ates. The scope was further expanded in 1993 to include audits of manufacturing affiliates in other parts of Asia. In

accordance with the principles of Responsible Care, audits are conducted on the state of maintenance and improve-

ment of environment- and safety-related administration systems as well as on observance and implementation of com-

pliance. These audits are implemented through documentation as well as on-site inspections. Each individual site also

implements regular audits and strives to maintain and improve its systems in compliance with ISO 14001-based envi-

ronmental management systems.

An MSDS

A yellow card

Fiscal 2003 Safety and Environment Audit Results(Conducted at four plants, two laboratories,and six domestic affiliates)

No. of items Current progress

Action pointed out 9 Situations corrected

Action advised 12 Situations corrected

Action demanded 46 Situations corrected

Fiscal 2003 ISO 14001 Audit ResultsInitial Approval registered for

Audit by “Approved assessment one establishmentRegistration Body”

SurveillanceRegistration maintainedat nine establishments

Internal auditsImplemented at 10 establishments All situations pointed out havebeen corrected.


Emergency training

In anticipation of fires, leakage, and other environmental accidents, each site conducts training to counter such emergencies.

Initial fire-extinguishing training (Sumitomo Bakelite Singapore Pte. Ltd.)

Leakage prevention training (Akita Sumitomo Bakelite Co., Ltd.)

Emergency action training (SB Flex Philippines, Inc.)

A recycling competition in which teams competefor accuracy in the sorting of waste materials

(Sumitomo Bakelite Singapore Pte. Ltd.)

Internal education related to the acquisition of ISO 14001 certification (Fers Resins, S.A.)

Environmental education

Each Sumitomo Bakelite office and facility conducts environmental education courses geared for personnel at three lev-

els: new recruits, middle-ranking employees, and veteran employees. The Company makes every effort to ensure that

these curricula result in structured and continual education. The primary content of these courses includes environmen-

tal issues surrounding the Company (and individual offices and facilities), environmental policies, targets, and objectives

at the office and departmental level, the handling of hazardous substances, organic solvents, poisonous materials, and

the MSDS-based handling of chemical substances. S.B. Techno-Research Co., Ltd., has compiled textbooks for edu-

cation on laws and regulations pertaining to chemical substances and the correct handling of chemical products. The

Company will be putting these textbooks to use in its environmental education programs.

Occupational Safety and Health


We are continuing to implement occupational safety and health programsaimed at providing healthy and pleasant work environments as well as ensuringaccident-free operations.

For many years, Sumitomo Bakelite and its employees have cooperated closely in promoting such safety programs as

hazard prediction training, pointing and calling confirmation, the 5S campaign, and near-miss prevention as well as

comfortable workplace creation programs. Moreover, after an accident occurs, we immediately convene a meeting of

the Safety and Health Committee at the relevant site, determine the cause of and countermeasures for such an acci-

dent, and quickly send an accident report to all Group facilities to prevent any recurrence.

Each year, despite the implementation of activities aimed at realizing a zero accident record, the total number of acci-

dents at the parent company and its principal affiliates has remained unchanged. However, the parent company

achieved the maintenance of zero incidence of accidents resulting in serious injuries or death in 2002 and 2003.

Recital of a zero accident pledge at theconclusion of a safety meeting

(Shizuoka Plant)Note: Figures are for the facilities listed on page 4.

46

52

33 3531

4147

29 3228

5 5 4 3 3

1999

2000

2001

2003

2002

0

20

40

60

(Number) Number of Industrial Accidents

Operations not interrupted

Operations interrupted

1999

2000

2001

2003

2002

0

1

2

3

(%) Frequency Rate*

All industries

Chemical industry

Sumitomo Bakelite Co., Ltd.

1.80 1.82 1.79 1.77 1.78

0.79 0.731.01

0.00 0.00

0.92 0.89 1.030.83 0.92

Number and Percentage of Accidents by Type in 2002

Pinches and entanglement13 incidents (34%)

Cuts and abrasions10 incidents (26%)

Contact with harmful materials, etc.

3 incidents (8%)

Falls (stumbles)2 incidents (5%)

Strains2 incidents

(5%)

Other6 incidents (16%)

Falls (drops)1 incident

(3%)

Falling objects1 incident

(3%)

Note: Figures are for the calendar year 2002.

Number and Percentage of Accidents by Type in 2003 Pinches and

entanglement5 incidents (16%)

Cuts and abrasions6 incidents (19%)

Contact with harmful materials, etc.1 incident (3%)Falls (stumbles)

2 incidents (6%)

Strains7 incidents (21%)

Other5 incidents

(16%)

Falls (drops)4 incidents

(13%)

Falling objects

2 incidents(6%)

Note: Figures are for the calendar year 2003.

* The frequency rate represents the number ofdeaths and injuries due to industrial accidents per1 million worker hours. It is calculated as follows:

frequency rate = (number of deaths andinjuries / number of worker hours) � 1,000,000

Note: Years are calendar years.

The graphs below show the number and percentage of industrial accidents at the parent company and its principal

affiliates by type of accident during the past two years. In 2002, “pinches and entanglement” and “cuts and abrasions”

accounted for 60% of the accidents. In response, we made an appeal for additional caution with respect to “rollers and

other revolving objects” and “cutter knives and other sharp objects” and we also established a specialized committee to

focus on eliminating such accidents.

As a result, the number of the above types of accidents was nearly halved in 2003, although the number of accidents

involving “strains” increased. In 2004, we are implementing a program focused on ensuring that workers do not attempt

unreasonable physical efforts, such as those involving passage through excessively narrow spaces or the unassisted

handling of excessively heavy objects.


Investment in safety and accident prevention countermeasures

The Sumitomo Bakelite Group continuously invests in safety and accident prevention countermeasures. In fiscal 2003,

¥140 million was used for such investment, principally in facility renovation and work environment improvement. Since

fiscal 1999, the Group has invested a total of ¥1.1 billion in such countermeasures.

Structural reinforcement as an earthquakecountermeasure (Shizuoka Plant)

Safety fence installed to prevent potentialdanger from contact with a roller

(Utsunomiya Plant)

Internal triathlon competition organized as part of a health promotion campaign (Sumitomo Bakelite Singapore Pte. Ltd.)

Education aimed at preventing accidentsinvolving pinches and entanglement

(Sumitomo Bakelite (Taiwan) Co., Ltd.)Shower and eye-rinsing unitinstalled as safety equipment

(Fers Resins, S.A.)

Safety initiatives overseas

Accident Prevention Countermeasure Investment in Fiscal 2003

¥140 million

Explosion, fire, and leakage countermeasures(21%)

Facility renovation (25%)

Improvement of working

environments (33%)

Earthquake and disaster

countermeasures (19%)

Other (2%)

Note: Figures are for the facilities listed on page 4.Note: Figures are for the facilities listed on page 4.

226

517

807

979

1,119

(FY) 1999

2000

2001

2003

2002

0

500

1,000

1,500

(¥ million) Cumulative Investment in Accident Prevention Countermeasuressince FY99


Elimination of CFC Usage, Management of PCBs, and Responses to Environmental Complaints

Elimination of CFC usage

The chlorofluorocarbon CFC-113 and 1,1,1-trichloroethane have been identified as ozone-layer-depleting substances,

and the Sumitomo Bakelite Group ceased using these substances in 1994. Both were used as cleansers, but they have

been replaced with alcohol- and hydrocarbon-based alternatives. Furthermore, although the chlorofluorocarbon substi-

tute HCFC-22 and the chlorofluorocarbon CFC-12 have been used as coolants in refrigeration units, in accordance with

the Law Concerning the Recovery and Destruction of Fluorocarbons, we are steadily working to replace these sub-

stances with alternatives.

Management of PCBs

There are four Sumitomo Bakelite facilities that have electric machinery (condensers) that contains PCBs in use or in

storage. Condensers in storage are kept in specialized vaults and strictly monitored to prevent any leakage or misplace-

ment. In the near future, in accordance with the Law Concerning Special Measures against PCB Wastes, we will steadi-

ly dispose of these condensers. We are also currently working to replace lighting fixtures with stabilizers that use PCB

alternatives.

PCB condensers Lighting fixtures with PCB stabilizers

Responses to environmental complaints

Each Group facility has adopted rules that stipulate the methods used to respond to environment-related complaints.

Two such complaints were received during fiscal 2003, and they were responded to as described below.

Category Date Facility Details of complaint Cause and Countermeasures

� Odor June 2003 Shizuoka Plant Report of odor received from local

resident via the municipal government

� Noise October 2003 Kyushu Bakelite Industry Complaint regarding excessive noise

Co., Ltd. at night received from local resident

PCB storage

SiteUnits Units in

in use storage

Shizuoka Plant 1 61

Tsu Plant 4 0

Hokkai Taiyo Plastic Co., Ltd. 0 2

Yamaroku Kasei Industry 0 4

Co., Ltd.

Total 5 67

SiteUnits

in use

Fundamental 0 123

Research Laboratory

Amagasaki Plant 0 39

Shizuoka Plant 52 178

Tsu Plant 0 131

Artlite Kogyo Co., Ltd. 0 6

Total 52 477

No. of units in useconverted to alter-native stabilizers

The odor was reduced by increasing the processing temperature of an

exhaust gas treatment unit that was believed to be the cause. No com-

plaint was received subsequently.

It was determined that the cause was the exhaust noise from a blower

within a device that removes cinders and other particulates from exhaust

fumes. A related silencer unit was cleaned and the direction of the partic-

ulate removal device was changed. Upon query, the complainant con-

firmed that the countermeasures were effective.


Green Purchasing

The Sumitomo Bakelite Group engages in “green purchasing,” which is the plac-ing of priority on goods with low environmental impact in purchasing operations.

Green procurement response

Purchasing operations that place priority on goods and services with low environmental impact, rather than simply price

and quality, are known as “green purchasing.” The Law Concerning the Promotion of Procurement of Eco-Friendly

Goods and Services by the State and Other Entities (Law on Promoting Green Purchasing) went into effect in April

2001, thus establishing green purchasing as the responsibility of the state and other institutions. Sumitomo Bakelite has

been conducting green purchasing for several years, primarily of office supplies. However, without any unified standard,

these efforts were implemented on an individual basis by each department. Now, with the enforcement of the Law on

Promoting Green Purchasing, a basic policy has been disclosed, which we used as the basis for our Green Purchasing

Standards that we enacted in April 2001. The table below outlines the purchasing standards for three items: paper,

office supplies, and OA equipment. Under our Environmental Accounting Compilation Guidelines, the cost for green

purchasing is categorized in “Reduction of environmental burden upstream and downstream,” and it is recognized only

when the green product is more expensive than the conventional product owing to the additional cost associated with

being environmentally friendly. However, since the price differences have narrowed to negligible levels, such additional

costs for green purchasing were not identified in our environmental conservation costs for fiscal 2003.

Moves in Europe to prevent environmental pollution from cadmium, mercu-

ry, lead, hexavalent chromium, and other substances related to the disposal

of manufactured products has spurred environmental protection initiatives

on the parts of manufacturers of electric and electronic products and auto-

mobiles throughout the world. In view of this, the Sumitomo Bakelite Group

has positioned itself to work as a “Green Partner” with its customers by

carefully managing its products’ content of problematic substances and

striving to design and provide products that do not cause environmental

pollution even following their disposal.

Certificate of Green Partner

Item Purchasing standards

Paper Data paper (copier paper, etc.) 100% recycled paper content with 70% or lower degree of whiteness

Printing paper 70% or greater recycled paper content

Office supplies Overhead projector film 30% or greater recycled plastic content

Business envelopes 40% or greater recycled paper content

Notebooks 70% or greater recycled paper content

OA equipment Copiers Units with energy conservation, sleep mode, and double-sided printing features

Printers, facsimile machines Selected based on level of energy conservation


Each facility of the Sumitomo Bakelite Group strives to be a corporation with anopen attitude toward society and proactively implements interaction with itssurrounding communities through a variety of activities.

We received a number of environmental and safety awards.

Social Activities

The Amagasaki Plant held a tour of its facilitiesfor the local government council to deepen

understanding of the plant’s operations.

The Amagasaki Plant held school tours as part of the local junior high school environmental

education program.

The Amagasaki Plant received the FireDefense Agency Director Award in recognition

of the high quality of its disaster prevention activities over many years.

P.T. Indopherin Jaya received an award fromIndonesian President Megawati Sukarnoputri

for the achievement of four consecutiveaccident-free years of operations.

SB Flex Philippines, Inc., donated old woodencargo pallets to a local elementary school,which then used the wood to make desks,

chairs, shelves, and other items.

The Information and TelecommunicationMaterial Laboratories and NEC both receivedthe Environment Minister Award in recognition

of their contributions to the promotion ofgreen sustainable chemistry (GSC) programs.

Each summer, the Shizuoka Plant hosts “coolevening festivals” to promote social interaction

with local residents.

Students from a school for children withspecial needs participated in an internshipprogram aimed at providing factory work

experience. (Utsunomiya Plant)

The Utsunomiya Plant participated in a fire-fighting competition with other local

companies.


ISO 14001 Certification

Sumitomo Bakelite is building a highly effective environmental managementsystem by obtaining ISO 14001 certification.

Kyushu Bakelite Industry Co., Ltd. (12/1998)

Sumitomo Bakelite (Suzhou) Co., Ltd. (11/2001)Sumitomo Bakelite (Taiwan) Co., Ltd. (5/2003)

SB Flex Philippines, Inc. (5/2001)

SNC Industrial Laminates Sdn. Bhd. (1/2001) Sumitomo Bakelite Singapore Pte. Ltd. (7/1997)Sumicarrier Singapore Pte. Ltd. (6/1998)SumiDurez Singapore Pte. Ltd. (8/1998)

P.T. Indopherin Jaya (1/2001)

N.V. Sumitomo Bakelite Europe S.A. (1/2001)

As part of its Responsible Care activities, the Sumitomo Bakelite Group has built an ISO 14001-based environmental

management system and is promoting the receipt of additional ISO 14001 certifications. Ten domestic sites and nine

overseas sites have already been certified, and we are preparing to obtain certification for an additional three facilities in

Japan and three overseas during fiscal 2004.

Sites that were certified as of March 31, 2004, are indicated on the map below.

Notes: 1. Dates of certification are indicated in parentheses.

2. Sites in bold are those of the parent company.

Akita Sumitomo Bakelite Co., Ltd. (1/2001)

Utsunomiya Plant (12/1997)

Artlite Kogyo Co., Ltd. (1/2003)

Kobe Fundamental Research Laboratory(12/2003)

Shizuoka Plant (3/1999)Decolanitto Co., Ltd., ManufacturingDivision (Shizuoka) (3/1999)

Tsu Plant (3/1999)

Amagasaki Plant (10/1998)ST Film Sheet Co., Ltd. (10/1998)


History of Environmental Conservation Activities

History of the Sumitomo Bakelite Group’s environmental conservation activities

Year Sumitomo Bakelite’s initiatives Social developments

1967 • Basic Law for Environmental Pollution Control enacted

1968 • Air Pollution Control Law and Noise Regulation Law enacted

1969 • Pollution countermeasure secretariat established

1970 • Water Pollution Control Law and Waste Management and Public CleansingLaw enacted

1971 • Environmental Agency established

1972 • Club of Rome announces “the limit to growth”• United Nations Conference on the Human Environment held in Stockholm;

Declaration of the United Nations Conference on the Human Environmentadopted

1973 • Environmental Management Division established• Environmental auditing of domestic in-house facilities commenced

1974 • Environmental Management sections established for each business facility

1978 • Environmental auditing of domestic affiliates commenced

1979 • Law Concerning the Rational Use of Energy enacted

1985 • The Vienna Convention for the Protection of the Ozone Layer adopted

1987 • Montreal Protocol on Substances That Deplete the Ozone Layer adopted

1989 • Basel Convention on the Control of Transboundary Movements ofHazardous Wastes and Their Disposal adopted

1990 • Environment Issue Action Committee established• Directors in charge of safety and environment appointed

1991 • Recycling Technologies Action Office established • Law Promoting the Use of Recycled Resources enacted

1992 • S.B. Recycle Co., Ltd., established • U.N. Conference on Environment and Development (“Earth Summit”) held

1993 • Environment and Safety Volunteer Plan formulated • The Basic Environment Law enacted• Environment and Safety Management Regulations drawn up• Environmental auditing of overseas affiliates commenced

1994 • Use of specific CFCs and 1,1,1-trichloroethane eliminated

1995 • Responsible Care Committee established • The Japan Responsible Care Council established• The Company joins the Japan Responsible Care Council as a founding member • Law for Promotion of Sorted Collection and Recycling of Containers and

Packaging enacted

1996 • ISO 14001 issued

1997 • Kyoto Protocol adopted by the Third Conference of the Parties of theUnited Nations Framework Convention on Climate Change (COP3)

1998 • First Environmental Activities Report issued

1999 • ISO 14001 certification attained by all Sumitomo Bakelite plants • Law Concerning Reporting, etc. of Releases to the Environment of SpecificChemical Substances and Promoting Improvements in Their Managementenacted

• Law Concerning Special Measures against Dioxins enacted

2000 • Environmental accounting adopted • Basic Law for Establishing the Recycling-based Society enacted

2001 • Environmental Report issued (with independent review report)

2002 • Soil Contamination Countermeasures Law enacted• Japan accepted COP3 Kyoto Protocol

2003 • Building Code revised as a means to counter the “sick house” phenomenon

2004 • Air Pollution Prevention Law revised to reduce VOC emissions

Items in blue print are worldwide developments.

• “Corporate Policies for Safety, Health and the Environment” revised• The Utsunomiya Plant and Sumitomo Bakelite Singapore Pte. Ltd. attain ISO

14001 certification

• Scope of Environmental Report coverage expanded to include facilities ofdomestic affiliates

• Tokyo Kakohin Co., Ltd., receives an award for promoting the reduce, reuse, and recycle policy

• Risk Management Committee established

• Yamaroku Kasei Industry Co., Ltd., becomes the Sumitomo BakeliteGroup’s first zero waste emissions plant. Subsequently, Kyushu BakeliteIndustry Co., Ltd., and the Amagasaki Plant also attain zero waste emissions status

• Compliance Committee established

• Shizuoka Plant introduces a co-generation plant• 23 Sumitomo Bakelite production bases in Japan and overseas attain

ISO 14001 certification (as of August 2004)


Independent Review Report


Corporate Data

33.0%

28.4%

0.3%

19.7%

18.6%

Fiscal 2003 net sales (non-consolidated)

Semiconductor and display materialsMaterials for circuitry and electronic componentsAdvanced plasticsQuality of life productsOther

1999

2000

2001

2003

2002

0

50

100

150

200

250

300

192.7 187.2

154.8 160.4 170.2

124.5 121.597.0 95.0 98.4

(FY)

(Unit: ¥ billion) Net sales

Non-consolidated net salesConsolidated net sales

For information on overseas Group companies, please refer to page 5 and pages 25 and 26.

Name


President

Tomitaro Ogawa

Established

January 25, 1932

Capital (as of March 31, 2004)

¥27.1 billion

No. of shareholders

(as of March 31, 2004)

21,780

No. of employees

(as of March 31, 2004)

2,349

Net sales (fiscal 2003)

¥98.4 billion (non-consolidated)

¥170.2 billion (consolidated)

Major products (categorized by division)

Semiconductor and display materials

Epoxy resin molding compounds

Liquid resin for semiconductors

Carrier tape for semiconductor surface mounting

Adhesive tape for semiconductor chip devices

Materials for circuitry and electronic components

Epoxy resin copper clad laminates

Phenolic resin copper clad laminates*

Flexible printed circuits*

Advanced plastics

Phenolic resin molding compounds

Polyvinyl resin molding compounds*

Urea and melamine resin adhesives*

Industrial-use phenolic resins

Formalin

Precision molded products

Precision molding dies

Quality of life products

Medical instruments*

Melamine resin decorative laminates*

Polyvinyl resin sheets*

Multilayer film sheets

*Products of affiliates

Period

Fiscal 2003

(April 2003 to March 2004)

Offices and facilitiesSumitomo Bakelite Co., Ltd.

Amagasaki Plant (and consolidated affiliates on plant grounds)

Shizuoka Plant (and consolidated affiliates on plant grounds)

Utsunomiya PlantTsu PlantFundamental Research LaboratoryKobe Fundamental Research Laboratory

Akita Sumitomo Bakelite Co., Ltd.Artlite Kogyo Co., Ltd.Tokyo Kakohin Co., Ltd.Hokkai Taiyo Plastic Co., Ltd.Yamaroku Kasei Industry Co., Ltd.Kyushu Bakelite Industry Co., Ltd.

Scope of the Environmental Report 2004


P.T. Pamolite Adhesive Industry

Sumitomo Plastics America, Inc.

CMK Singapore Pte. Ltd.

Sumitomo Bakelite Singapore Pte. Ltd.

Advanced Plastics Compounds Singapore Pte. Ltd.

CMK Europe N.V.

Sumicarrier Singapore Pte. Ltd.

Tsu-Kong Co., Ltd.

SumiDurez Singapore Pte. Ltd.

SNC Industrial Laminates Sdn. Bhd.

CMKS (Malaysia) Sdn. Bhd.

P.T. CMKS Indonesia

P.T. Indopherin Jaya

Sumitomo Bakelite (Suzhou) Co., Ltd.

Durez Corporation

Durez Canada Co., Ltd.

N.V. Sumitomo Bakelite Europe S.A.

SB Flex Philippines, Inc.

Sumitomo Bakelite (Taiwan) Co., Ltd.

Bakelite Precision Molding (Shanghai) Co., Ltd.

Promerus, LLc.

Rigidtex Sdn. Bhd.

Sumitomo Bakelite Macau Co., Ltd.

Sumitomo Bakelite Vietnam Co., Ltd.

Bakelite Shoji (Thailand) Co., Ltd.

BASEC Hong Kong Limited

Sumitomo Bakelite Hong Kong Co., Ltd.

Bakelite Trading (Shanghai) Co., Ltd.

SB Durez Holding, Inc.

Sumicarrier (Thailand) Co., Ltd.

Sumitomo Bakelite Europe (Barcelona) S.L.

Fers Resins, S.A.


Domestic Affiliates

Overseas Affiliates

Head Office

Tennoz Parkside Building, 2-5-8, Higashi-Shinagawa,

Shinagawa-ku, Tokyo 140-0002

� +81-3-5462-4111

Fundamental Research Laboratory

495 Akiba-cho, Totsuka-ku, Yokohama, Kanagawa 245-0052

� +81-45-811-1661 FAX: +81-45-812-4898

Kobe Fundamental Research Laboratory

1-1-5, Murotani, Nishi-ku, Kobe, Hyogo 651-2241

� +81-78-992-3900 FAX: +81-78-992-3919

Osaka Office

2-3-47, Higashi-Tsukaguchi-cho, Amagasaki, Hyogo 661-8588

� +81-6-6429-6941 FAX: +81-6-6427-8055

Nagoya Office

87 Chouda-cho, Meitou-ku, Nagoya, Aichi 465-0027

� +81-52-726-8351 FAX: +81-52-726-8396

Amagasaki Plant

2-3-47, Higashi-Tsukaguchi-cho, Amagasaki, Hyogo 661-8588

� +81-6-6429-6941 FAX: +81-6-6427-8055

Shizuoka Plant

2100 Takayanagi, Fujieda, Shizuoka 426-0041

� +81-54-635-2420 FAX: +81-54-636-0294

Utsunomiya Plant

20-7, Kiyohara Kogyo Danchi, Utsunomiya, Tochigi 321-3231

� +81-28-667-6211 FAX: +81-28-667-5519

Tsu Plant

5-7-1, Takachaya, Tsu, Mie 514-819

� +81-59-234-2181 FAX: +81-59-234-8728

Akita Sumitomo Bakelite Co., Ltd.

Tsutsunaka Plastic Industry Co., Ltd.

Artlite Kogyo Co., Ltd.

Tokyo Kakohin Co., Ltd.

Hokkai Taiyo Plastic Co., Ltd.

Nippon Denkai Co., Ltd.

Otomo Chemical Co., Ltd.

Yamaroku Kasei Industry Co., Ltd.


Japan Communication Accessories

Manufacturing Co., Ltd.

SPD Co., Ltd.

ST Film Sheet Co., Ltd.

Advanced Plastics Compound Company

Sunbake Co., Ltd.

Decolanitto Co., Ltd.

Sumibe Service Co., Ltd.

S.B. Techno-Research Co., Ltd.

S.B. Information System Co., Ltd.

S.B. Recycle Co., Ltd.

SBTEG Co., Ltd.

Contact: Environment, Safety & Recycling Dept.

Tennoz Parkside Building, 2-5-8, Higashi-Shinagawa, Shinagawa-ku, Tokyo 140-0002, Japan

TEL: +81-3-5462-3472 FAX: +81-3-5462-4881

URL: http://www.sumibe.co.jp/english/

Aiming to help protect the global environment, Sumitomo Bakelite has printed this pamphlet on Forest Stewardship Council (FSC) approved

paper using soybean oil-based ink and a waterless printing process that generates a relatively small amount of harmful waste fluid.

Dec. 2004 Printed in Japan

Responsible Care®

30%MinimumSA-coc-1210

At least 30% of the fibre used in the manufacturing process of this product comes from well-managed forest independently certified according to the rules of the Forest Stewardship Council.

environmental report 2004

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